The Automation of Management

By Gerald Huff

While most discussions of the impact of automation on jobs have focused on blue-collar and professional jobs, two recent articles have raised interesting and important questions about the impact of technology on the future of management jobs.

In Here’s How Managers Can Be Replaced By Software, Devin Fidler describes a prototype management tool (“iCEO”) that supervised a research project for a Fortune 50 client by coordinating the work of contract workers automatically.

"iCEO routed tasks across 23 people from around the world, including the creation of 60 images and graphs, followed by formatting and preparation. We stood back and watched iCEO execute this project. We rarely needed to intervene, even to check the quality of individual components of the report as they were submitted to iCEO, or spend time hiring staff, because QA and HR were also automated by iCEO. (The hiring of oDesk contractors for this project, for example, was itself an oDesk assignment.)"

With just a few hours of upfront task definition, the iCEO software managed the entire project over several weeks and created a 124-page report on the production of graphene. Fidler is optimistic that future iterations of iCEO will be quite capable of substituting for middle management:

"While management is an information-intensive activity, APIs (or software interfaces), are making it ever easier for computers to effectively route and track work projects … Our iCEO prototype points to a not-too-distant future in which these APIs will not only manage simple processes, but also help conceptualize and oversee an endless variety of projects  —  functions traditionally performed by management."

Peter Reinhardt’s Replacing Middle Management with APIs identifies the same kind of threat to middle management jobs in “platform” applications like Uber and Instacart that use software to automate the distribution of work to humans. He argues:

"The software layer between the company and their armies of contractors eliminates a huge amount of middle management, and creates a worrisome disconnect between jobs that will be automated, and jobs of increasing leverage and value."

The Uber driver and Instacart shopper have no upward career path into higher-paying supervision and management jobs because those jobs do not exist at those companies. The workers also have no social interaction with people in those positions who might mentor them or recommend them for such positions at other companies.

"Drivers are opting into a dichotomous workforce: the worker bees below the software layer have no opportunity for on-the-job training that advances their career, and compassionate social connections don’t pierce the software layer either. The skills they develop in driving are not an investment in their future. Once you introduce the software layer between “management” (Uber’s full-time employees building the app and computer systems) and the human workers below the software layer (Uber’s drivers, Instacart’s delivery people), there’s no obvious path upwards."

From Uber’s perspective, task assignment and supervision are delegated to the software, and performance evaluation is delegated to the customer reputation system. So, even if Uber does employ hundreds of thousands of drivers (before shifting to self-driving cars), it does so without creating any middle-class supervisory and management positions.

In addition to this kind of direct substitution of software that performs management functions, it’s important to note that another major threat to management jobs is the elimination of front-line workers themselves as they are replaced by automation. For example, in a decade or so, when most customer service reps are replaced by artificial intelligence that uses natural language, all the supervisory and management positions in call centers will be eliminated as well.

When confronted with concerns about technological unemployment, many people identify some jobs that “will never be replaced by a machine” and then feel free to disregard the risk. The job of “manager” is often put in this category. But as Fidler and Reinhardt warn, management and supervisory jobs are not immune to technological progress. And these jobs make up about 10 percent of U.S. employment, at wages 1.7 times the average wage  —  the core of our classic middle-class jobs.

Image credit: Flickr/Global Panorama

Gerald Huff is the principal software engineer at tesla motors, and featured speaker at the upcoming Closing The Gap: Solutions For An Inclusive Economy.